Tag Archives: Collecting

This is a wonderful short film made by American filmmaker Sean Dunne about 4 years ago.

The film called ‘The Archive’ tells the story of legally blind record collector, Paul Mawhinney from Pittsburgh, PA, who has been collecting records for over 40 years. He has now accumulated what must be a world record in record collecting, apologies for the obvious pun there, but his collection now boasts an incredible 1 million albums and over 1.5 million singles.

He is now retiring and is in the process of selling his archive.

Mawhinney was born and raised in Pittsburgh, PA. Over the years he has amassed what is believed to be the world’s largest record collection. Due to health issues and a struggling record industry he is now being forced to sell his collection.

This is the story of a man and his records, beautifully told by a talented filmmaker. Hope you enjoy it.

Cameraman Philip Bloom has worn many hats through-out his career, amongst them photographer, blogger, entrepreneur, educator, writer, marketeer. Apologies if I have missed any. It is through his wonderful talents as a film-maker however that he has risen to prominence outside of his industry.

He has made many fine short films over the past number of years, many of which can be seen on his site philipbloom.net, or on his Vimeo page. One of my favourites is his short documentary about the camera shop owner and collector Anthony Vizzari.

Vizzari sells antique photographic equipment, cameras etc. but also collects old antique Photo-Booths. The short documentary film below by Bloom, tells Vizzari’s story and also delves deeper into another interesting but macabre subject that Vizzari has been collecting for years. (Warning some of the images can be a bit disturbing)

An extraordinary price of £51m was achieved yesterday for a Chinese vase discovered in a regular clearance of a bungalow’s contents in north London.

The vase, part of an inheritance put on sale by a brother and sister at Middlesex auctioneers Bainbridges of Ruislip, is from the Qianlong period, c.1740s to late 1790s, an era renowned in China for the quality and perfection of its porcelain.

The scenes in the auction room were reminiscent of the bidding war that erupted at Irish auction house Sheppards of Durrow in March, when another Qianlong vase went from €50 to €100,000 within the space of a couple of seconds. At Bainbridges the astonished punters watched in awe as the gravity defying bids increased by increments of one million pounds at a time.

The discovery of such a vase would be a major find for any auction house, but it is especially sweet for Bainbridges, a 30 year old company which is not one of the major London auction houses.

The blog on the Bainbridges website (yes I said ‘Blog’, Irish auctioneers please note!), tracked the growing excitement within the company as they came to realize the extent of their good luck and indeed that of their clients. The entry posted on November 1st, sums it up.

Bainbridges auction catalogue

‘…I can’t easily explain the excitement that is building up here in Ruislip. In the normal course of our business and from a local house clearance we have received generous instructions to offer what must be one of the most important Chinese vases to be offered for sale this century. ‘

Hyperbole not withstanding, all the research pointed to something very special. When they placed an estimate of between £800,000 and £1.2m on the vase, it was backed up by more than just gut instinct and hopeful guesswork.

It is often said that all you need to get a good price at auction is to have two bidders present who want to buy the same item. If you paraphrase that to, countless bidders with newly-found riches from the orient, competing for a unique piece of Chinese Imperial history, you get what is reputedly the highest price paid for any Chinese work of art at auction.

The 16in high masterpiece was eventually knocked down to a private buyer from mainland China, who unsurprisingly wishes to remain anonymous. With a hammer value of £43m, along with auctioneers commission fees of 20% (plus taxes), the buyer will eventually pay an amount somewhere in the region of £51m.

This article was first published March 5th, 2000, in the Sunday Business Post

The number of column inches that the price-fixing fiasco between Sotheby’s and Christie’s has received recently has been nothing short of startling. But the subsequent resignations, the US Justice Department antitrust investigations and the outcry from clients and shareholders have to a great extent overshadowed the power and influence that these two monoliths of the art world really command.

Amazingly they control 95 per cent of the worldwide art salesroom business and have done so for many years.

A quick glance at the problems that Bill Gates is currently experiencing only goes to show how influential they have been in keeping their monopoly on art sales to themselves for the past two and a half centuries.

Sotheby’s, for instance, bigger of the two by just a whisker, was a company that started as a bookseller in 1744.

Its first sale, the contents of a gentleman’s library, barely realised a couple of hundred pounds, yet last year they recorded a turnover of just under 2 billion dollars.

The company was bought in 1983 by American entrepreneur Alfred Taubman, a shopping centre billionaire who swiftly used his considerable talents to turn a venerable old institution into a powerful stock market performer with over 100 offices around the world.

The board now boasts such influential surnames as Rockefeller, Getty and von Thyssen to name but a few.

When the downturn came in the late 1980s, the market slowed considerably, especially with contemporary art which bottomed out completely. The need for cashflow, as in every business, was pressing.

Drastic measures had to be taken and as everyone now knows, this was the genesis of the cosy cartel and tinkering with commissions which is just the latest in a series of high-profile gaffes.

But Sotheby’s had been involved in controversy before. Take the sale of thf McAlmont estate in Mount Juliet, Co Kilkenny, in 1986. The estate had just been sold to a consortium of businessmen headed by Tim Mahony of Toyota Ireland to be developed as a golf and country club.

The sale of the contents of the house – a unique collection that had been in the McAlmont family for a few generations – was handled by Sotheby’s and was a high-profile affair that attracted attention from private buyers and dealers from across the globe.

A heavily illustrated catalogue was issued and the sale went very well. Except for one hiccup; one of the paintings which had an estimate in the low hundreds sold for £27,000.

To most people that would be a godsend but the art world does not like surprises of this nature.

Sotheby’s thought the painting so insignificant that there wasn’t even an illustration of it in the catalogue.

It was subsequently learned that the painting had been bought by London art dealer David Posnett, who had identified the work as a sketch of Captain Cooke by William Hodges. Hodges was the official artist on Cooke’s voyages to the south seas.

Posnett later sold the painting to the National Maritime Museum in Greenwich for stg£650,000.

With the resources available to the big two, one wonders how something on this scale could happen.

One half of one of their big departments, of which the have numerous experts in every conceivable area of collecting, would still be bigger than our biggest Irish auction house, yet things like this rarely if ever happen here.

But the established Irish dealers and auctioneers are not faceless monolithic institutions worrying about share prices.

Sothebys make auction history with Francis Bacon’s Tryptych 1976 which made $86m in 2008

Quiet competition, the personal touch and attention to detail have always worked well in this country.

The real question lies in the relationship between business and art.

As far as the visual arts are concerned, a lot of hungry artists are leading a less hungry existence because of corporate buying policies. But when big business enters the fray with dollops of other people’s money, it is time for the ordinary collector to take stock. Artificial markets tend to bubble and burst.

Meanwhile cracks are beginning to appear. Sotheby’s shares have dropped from a high of $47 last year to around $15 last week.

The best advice would be to let the big boys fight it out for themselves. Competition is always good for business. The collector can be the only winner.

This article was first published March 5th, 2000, in the Sunday Business Post

Newgrange – Our interest in timekeeping has changed little in 5000 years

This article was first published in the ‘Collector’s Corner’, Sunday Business Post, Feb 2000 under the title ‘Timely reminders’, and March 5th 2000, under the above title, ‘The beauty of buying time’

With the hullabaloo from the millennium celebrations and universal obsession with recording that moment now relegated to distant memory, it is worth looking at how our forefathers recorded the passage of time down the ages.

It is true to say the passage of previous milleniums were not celebrated with a glass of bubbly in one hand and a fine Rolex chronometer on the other. It is also true that time has held and intense fascination for humans from the moment they first walked out of the jungle.

The widespread interest in the coverage of the winter solstice at Newgrange aptly illustrates that little has changed in the space of 5,000 years.

The technology which was employed by our Irish ancestors is even more amazing now when placed in the context of the era.

Up until the Middle Ages the best that money could but extended to the lowly waterclock or sundial. Mechanical clocks as we know them were only invented in the late 13th century and they are among the most charming if not the most intriguing of antiques.

This is due principally to the major innovations introduced from the 17th century onwards. Their attraction lies in our ongoing appreciation of mechanical or, more so today, technological ingenuity.

But clocks and watches have immense decorative allure and many pocket watches and wristwatches are sought after more for their qualities of design than for the accuracy of their timekeeping.

Such pieces can be appreciated in the same way as a piece of furniture or even a painting.

Most types of clock, and there are many different varieties to suit every taste and budget, display not only the technical wizardry of the clockmaker but also that of the polisher, engraver, brass caster, dial painter and cabinetmaker.

Some variations on the theme include the longcase (commonly referred to as the grandfather clock), carriage, bracket, lantern, cartel, regulator and chronometer.

While the market has changed over the past number of years, with prices for good pieces by the recognised French and English makers at the top fetching huge sums, there are still bargains to be had for the discerning collector.

There is a wealth of knowledge out there for the enthusiast but it must be said that Ireland has a long and proud tradition in the craft, and perhaps it would be wiser to look closer to home first.

Going by recent prices in the auction rooms around the country, prices for longcase clocks can vary considerably.

They typically start from £450, depending on maker and quality, but can fetch up to £10,000.

Occasionally pieces of extraordinary quality appear for which there is and all too eager feeding frenzy, and prices are adjusted accordingly.

But, as always, there are bargains to be had, and at the lower end of the market, you could be starting your collection for as little as £50.

This article was first published in the ‘Collector’s Corner’, Sunday Business Post, Feb 2000 under the title ‘Timely reminders’, and March 5th 2000, under the above title ‘The beauty of buying time’

This article first appeared in the February 2000, in the Sunday Business Post

Considering the current activity within the equity markets, especially with technological stocks on the Nasdaq, it is easy to forget that long before the performance of firms like Microsoft, Iona and Baltimore Technologies were part of dinner party conversations, the profit motive was a secondary factor in the acquisition process. Factors such as functionality, desirability and beauty took precedence over profit and percentages.

It is now worth going back to the pleasure-versus-profit question in relation to antiques.

The property market has given a steady return on investment of 12 to 20 per cent, depending on where you live, over the past number of years, but the stratospheric price rises that are common among internet stocks at the moment have been seen on numerous occasions in the antiques business.

Consider the Irish artist Jack B Yeats, brother of poet William B Yeats and friend to many literary icons of the era. His style of painting was considered a little inaccessible until the mid-1970s.

But then, for no apparent reason other than that tastes and attitudes had changed, his popularity and value shot through the roof. A fine example of his work was sold at auction by Adams in their Stephen’s Green auction rooms in 1986 for £40,000, and was sold for close to £52,000 at Sotheby’s in London just over a year later.

This was a record price for a word by the artist at the time, and a tidy return on investment. But in the context of today’s property market, and indeed some of the more attractive equities, this would seem rather unspectacular.

But the timescale involved and the prevailing economic climate at the time should be considered. If you consider the fact that good works by the artist can command seven-figure sums when they come to market, the figures speak for themselves.

But what is value in relation to the antiques world? Beauty-which is not a word in the stockbroker’s vocabulary-is, as they say, in the eye of the beholder. It should be the cardinal consideration in determining value, and is quite subjective, regardless of price.

The aesthetic value, coupled with the practicality of the item and its functionality, allied to a little bit of common sense and basic research, are all parts of the decision making process, and thus part of the joy of collecting.

After all, you are going to have to live with your purchase for a couple of years, so obviously you would not buy a Victorian mahogany breakfront library bookcase if you lived in a one-bedroom apartment. Quite apart from the cost, anything from £5,000 upwards, the sheer scale alone should promote a bit of head-scratching. Taking out a Black & Decker is not an option.

But sitting on your Chippendale chair while sipping champagne from you antique crystal flutes can be rewarding when you know that the objects of your desire are increasing in value by the second.

A few caveats here. As with equities, some collectibles do go out of favour from time to time. This is more a feature of the amount of money in circulation and the rules of supply and demand than a crash or the bottom falling out of the market. But it always returns.

Buying at auction can be exciting, but before you purchase you should always check the fine print and conditions of sale. Many prospective purchasers forget or are unaware that the auction houses charge the buyer as well as the seller.

Commission rates vary, and Vat is calculated as a percentage of his figure, but it is wise to add this into your price range before you start shaking your paddle about.

And so to the pleasure-versus-profit question. If you buy what you like and what you can afford, with a good eye and modicum of knowledge, you can have both pleasure and profit without the pain. As with the equities market, it is never too late to start.

This article was first published in Collectors Corner, Oct 1st, 2000 in the Sunday Business Post

In case you hadn’t noticed from the masthead, today is the first of October. This is of no major consequence except for the fact that from now until the end of the year, we can expect to be inundated with those annoying adverts announcing the countdown to Christmas.

Not to be outdone we have decided that if you can’t beat them, you can at least get your say in first.

With only a little over ten weeks to go until December 25, those much-loved gift items, teddy bears, are a seasonally appropriate topic.

There are few objects which provide a more intimate link with the past than an old teddy bear or a cloth doll.

In good condition these souvenirs of childhood can be of far more than sentimental value.

Teddy bears, more so than other soft toys, have acquired considerable value as collectables of late, with the rarer ones changing hands for five figure sums.

While soft bears on all fours were made before 1900, it was not until around 1902 that the first ones appeared with movable joints and not until 1906 that the teddy bear got its name.

In 1902 US President Theodore “Teddy” Roosevelt, who was a keen hunter, appeared in a newspaper cartoon refusing to shoot a bear cub.

The cartoon go national attention in the US at the time and soon afterwards the bear cub was used in other cartoons featuring Roosevelt.

Steiff bears are still produced today.

At the time soft toy bears were being imported from Germany in large quantities and they soon became popular with Roosevelt’s adult followers. By 1906 the toys had become known as ‘teddy bears’.

The first teddy bears looked fiercer than the cuddly teddies we are now familiar with, as their features were originally modelled on grizzly and brown bears.

But gradually their appearance changed to the furry creature that we know today.
This was due in no small part to a German lady called Margarete Steiff, founder of the Steiff Toy Company. Steiff, who was polio-stricken from an early age, began making underskirts for a firm in Stuttgart in 1877 as a means of gaining independence.

In 1880 she made her first soft toy, an elephant, using felt from her uncle’s felt factory. This was soon followed by pigs, horses, cats and camels and in 1884 she made her first standing bear.

For some time Steiff bears failed to arouse much interest, but a US company placed an order for 3,000 of her bears at the Leipzig Fair in 1903 and the Steiff bear took off.

The fine quality of the bears has ensured that Steiff bears have become one of the most popular makes for bear collectors today.

Arctophiles, as teddy bear collectors are called after the Greek word arctos, meaning bear, will pay thousands and even tens of thousands of pounds for the rarer examples.

While Steiff bears can be identified by the small metal button in the left ear, imitation buttons are now being made so it may be useful to examine an authenticated button before buying.

The designs of the buttons have changed over the years and if they are in good enough condition can be used to determine dates. Prices vary according to age, colour, condition, maker and size.

Only bears in good condition, with their fur intact, and identifiable as being made by a recognised firm have kept or increased their values.

Unusual colours can command higher prices but rare black Steiff bears can fetch as much as £30,000 when they come up at auction though collections can be started from as little as £200 to £300.

This article was first published in Collectors Corner, Oct 1st, 2000 in the Sunday Business Post

This article was first published April 2, 2000 in the Sunday Business Post.

The online auction marketplace has changed considerably in 10 years.

Auction Houses go Online

They said it couldn’t last. For months the analysts have been painting the walls with a dark thick impasto. The message was there for all to see – internet stocks were simply selling way above their value.

As long as share prices kept on rising no one was willing to ask the important questions – where are the profits, where is the revenue.

But in spite of recent setbacks, I wouldn’t necessarily write the internet out of the equation just yet.

The “even-ning out”, as it was euphemistically called last week, of the new versus the old economy shares has justifiably put the whole issue of the function, usefulness and philosophy of the internet into focus.

As far as the antiques trade is concerned it is either a godsend or a major thorn in the side, depending on your perspective and level of technology awareness.

The growth of online auctions on the web has the potential to change the entire nature of the business and for both buyer and seller it should be looked at with equal parts enthusiasm, apprehension and prudence.

There are still a lot of issues that have to be addressed, most notably security, payment methods and insurance. But all these issues are currently being sorted out and should be seen not as obstacles to entry, but rather as opportunities to develop greater confidence for both vendor and buyer in the potential of trading over the net.

You could say that it was really Amazon that started the whole e-commerce ball rolling.

It was Amazon, at any rate that first caught the public imagination. It started out as a small retailer of books over the internet, and then metamorphosed into a super retailer of anything to anyone, anywhere.

Then came the “clicks and mortar” revolution as major American companies decided that they should be having a slice of this rather large cake. One after another they set up e-tailing departments and began plying their wares over the internet.

With expectations for Christmas sales over the internet now set to exceed conventional channels within a couple of years the rest of the word has woken up.
Enter the online auction house.

As usual the US has set the example and the rest of the world has not been too slow to catch up this time.

The first site to receive any significant attention was Ebay (www.ebay.com) and it is still very much the benchmark against which all others have set their standards.
Ebay likes to refer to itself as an online trading community, which is a reversion to older trading methods where the middleman was cut out of the trading flow and individuals sold directly to each other.

This philosophy of community is further enhanced by Ebay’s bulletin boards where like-minded individuals can discuss mutual areas of interest.

Sellers are encouraged to set up their own home page with facilities on the site providing for lists and pictures of items, biographies of the sellers and recommendations from previous purchasers.

Their ultimate aim is to bring online trading into the realm of lifestyle choice but in reality the overall thrust of the site lends itself more towards the car boot sale analogy than the auction house one.

But having said that Ebay’s success has been phenomenal and its imitators large in number.

An Irish version Ebid (www.ebid.ie) was launched in January and, as should be expected, it has a significantly Irish flavour.

But it has a long way to go to being anywhere near as successful as Ebay. The Ebay site literally had millions of items for sale when I looked at it last week as opposed to the couple of hundred on the Ebid site. But it is early days yet.

As far as costs go commissions on sales are calculated on a sliding scale of between 0.5 per cent to 5 per cent by Ebid; these are based on the value of the item being sold.

With all this activity in online auction sales it obviously wasn’t long before the traditional auctions houses began to look on the online revolution as a threat. The situation had to be remedied, and quickly.

Cue Sotheby’s and its strategic link up with Amazon at the beginning of last year. In the slow moving conservative world of antiques and fine art a move of this nature by the world’s biggest auction house had to have significant reverberations.

Where Sotheby’s goes the rest follow, it seems. In one fell swoop the internet, which was just a novelty to the antiques community for years was immediately at the top of every boardroom agenda.

Internet strategies had to be developed, domain names had to be registered, sites had to be built. The results of the frenetic scramble to get connected have been nothing short of amazing.

It is too early yet to predict what the final shape of the online market will be like in relation to the antiques trade, because the internet revolution is only really starting in this arena now, and with the underlying uncertainty that has characterised the other stampedes to market, it is really anbody’s guess.

To put things in perspective – two weeks ago I received with my weekly copy of the bible of the English trade, The Antiques Trade Gazette (ATG), a copy of their second ATG Internet Handbook.

The first one was published last summer and contained just under 600 entries on antiques and fine arts related sites, web addresses etc. This one runs to about 100 pages and contains more than 1,000 entries.

The interesting point noted by the publishers is not the increase in the number of sites but the number of sites that have fallen by the wayside in the space of a few months.

There is no doubt about it, these are exciting times for the antiques trade. It is fair to say that a new era has commenced and already there are talks of mergers, acquisitions and strategic agreements between all sorts of erstwhile competitive parties.

The talk at the moment is all about gateway sites where large numbers of smaller dealers and auctioneers get together and attract customers under one large banner.

But the oft used analogy of car manufacturers at the beginning of the century in the US is still the most apt – of the 40 or so manufacturers that were active during that period only three exist today.

The trick is in picking the final three – I’m off to polish my crystal ball.

The Irish Antiques trade, which usually shows a time lapse of about six months in adopting new practices, has not been found napping this time. The majority have now set up their own websites, which are listed below.

The quality varies. Most are still just at the company brochure stage, some carry catalogues, but none offer online trading, and it is debatable if there is a need for it here.

The only criticism I have of the majority of these sites is the fact that some have not been updated for months.

This article was first published in ‘Collector’s Corner’ of the Sunday Business Post, September 24th, 2000

Christ Church, Dublin – Francis Grose c.1792

Although the term ‘topographical painting’ suggests connections with local geography, landscape and mapmaking, in the strictest sense topography means the portraiture of places.

The topographer’s task was chiefly to gather information and record a view for posterity. The topographical artist was a true transcriber of what he saw before him, and although the accuracy of the representation varied with the abilities of the individual artists, their contribution to the body of historical record and to the development of art should not be underestimated.

Topographical painting in watercolour in Ireland began around the middle of the 17th century, and over the next 150 years Ireland’s towns, cities and countryside were preserved for posterity, through pen and ink by a small, but select group of artists who devoted themselves to travelling nationwide and recording what they saw.

Artists such as Francis Place, (1647 to 1728), Francis Grose, (1731 to 1791), John James Barralet, (1747 to 1815), William Ashford, (1746 to 1824), the Brocas family (mid-17th to mid-18th century), George Petrie, (1790 to 1866), WH Bartlett, (1808 to 1854), and of course James Malton, (c.1760 to 1803) devoted the best part of their lives to the art form.

They all possessed a common characteristic: an ability to record scenes with extraordinary accuracy. This, combined with their aesthetic appeal, bestowed their work with great historical importance.

The artistic profession in the mid-1700s was not a well-paid one, unless of course it was by way of regular portrait commissions, and they were few and far between. When a number of engravers set up shop in Ireland around that time it provided great encouragement for the watercolourist. The work could now be appreciated in every home at a modest price and their names would be known by more than just the monied few.

Castleyard Dublin, By James Malton

The late 18th century saw a new type of print being introduced which could convincingly suggest the delicate wash qualities of watercolour which was a drawback with the older engraving process. This new print, the aquatint, proved extremely popular, and it was common for publishers to employ teams of engravers and colourists for fulfil the growing demands of the newly rich. It was common for the plate to be printed in two or three colours, which added an extra appeal.

One of the artists who quickly saw the potential of this new medium was James Malton. Malton had arrived from London around 1785 where he had studied geometry and perspective. He worked for a period as a draughtsman in the office of architect James Gandon, designer of the Customs House, among others, but as he was an accomplished watercolourist, he decided his talents lay elsewhere.
Indeed his father and his brothers were also fairly adept in the field. His brother Thomas held evening drawing classed in London and numbered among his more famous students one budding artist named JMW Turner.

James Malton’s famous and valuable pictorial record of the city of Dublin, A Picturesque and Descriptive View of the City of Dublin, Displayed in a Series of the Most Interesting Scenes Taken in the Year 1791, was published in parts from 1792 to 1799. The plates were made from watercolour drawings executed by Malton.
A total of 25 were reproduced in etching and aquatint with the work carried out by the artist himself. Each plate was accompanied by a descriptive text, headed by a dedication and vignette in aquatint by Malton. All were inscribed.

They proved so popular that printing continued until the 1820s. Although Malton’s fame rests largely with his 25 views of the city, copies of his prints are now highly sought after by collectors, and the book is still popular today.

James Adam has a set of 22 monochrome engravings, together with two maps by Malton, for sale on Wednesday. They come with an estimate of between £3,000 and £5,000.

This article was first published in ‘Collector’s Corner’ of the Sunday Business Post, September 24th, 2000

This article was first published in the Sunday Business Post, October 1st 2000

News was emerging last week of a possible denouement to the long running price fixing dispute between the two leviathans of the fine art auctioneering world, Sotheby’s and Christie’s

It now appears that both firms will be paying out over $500 million in compensation to clients who allege that collusion over commission rates cost them money.

This story, which has captivated art market watchers since it first broke in January this year, contains all the elements of a Jeffrey Archer novel. It is a story of international intrigue, billionaire businessmen, secret memos, class action lawsuits, gentleman’s agreements, New York socialites, Department of Justice investigations and of course, price fixing.

The politician turned novelist Archer has experienced a few problems himself this year but they cannot possibly compare to the annus horribilis experienced the world’s two leading auction houses.

The key players in the saga, are Alfred Taubman and Francois Pinault. Taubman, a billionaire Detroit shopping centre magnate was the chairman of Sotheby’s until the beginning of this year.

He made his fortune by transforming outdated suburban shopping malls into playgrounds for the rich with designer shops and trendy cafes in the late 1960’s and 1970’s.

Taubman bought Sotheby’s in1993 for $130 million and soon afterwords took the company public in London and New York.

The shares subsequently skyrocketed on the back of massive earnings from the overheated New York art market of the 1980’s and although he is no longer chairman of the company, he still effectively retains control.

Francois Pinault, meanwhile, is the hardnosed French billionaire and owner of Gucci, Samsonite and Chateau Latour, the top Bordeaux vineyard.

He is also owner of the Vail ski resort in Colorado and through a labyrinthine network of other companies, is also involved in newspapers, books, software, music and clothing chains.

He bought Christie’s outright in 1998 for $1.2 billion just after it had overtaken Sotheby’s in annual earnings. It had been a public company since 1973, but Pinault took the company private. According to Forbes Magazine he is currently worth about of $8 billion

The origins of the current dispute go back to 1997, when the US Justice Department began an antitrust investigation of dealers and auction houses in relation to price fixing and anticompetitive behaviour.

The investigation quickly zeroed in on the big two, who between them control nearly 95 per cent of global art auction sales.

US government officials raided Christie’s and Sotheby’s in New York and seized documents relating to commission fixing.

As the investigations were continuing, Pinault, having bought Christie’s, moved a large team of accountants who checked the books with a fine tooth comb. Then on Christmas Eve 1999, Pinault fired Christie’s chief executive officer Christopher Davidge

The firm issued a press release stating that it had become aware of “information relevant to the antitrust investigation and this information had been handed to the Justice Department in return for immunity from criminal prosecution.

This was a master stroke by Pinault because under US antitrust law, only the first party in a cartel can qualify for immunity. Soon afterwards Christie’s changed its pricing structure, a clear signal that the so called gentleman’s agreement between the two firms had ended. After that the revelations came fast and furious.

There was talk of a memo dating back to the mid1990s written by Sir Anthony Tennant, then chairman of Christie’s, to his chief executive Christopher Davidge which detailed a discussion between himself and Taubman in relation to commission payments

This vital piece of evidence is believed to have prompted Pinault’s lawyers to make a deal with the Justice Department in return for immunity from prosecution.

Pinault’s action also made Sotheby’s more vulnerable to hundreds of millions of dollars’ worth of compensation claims from art dealers and collectors. Around this time a number of both companies’ clients were beginning to assemble a class action suit against them.

The same was true of Sotheby’s shareholders, who claimed that the alleged collusion had artificially, inflated the firm’s shares on the New York Stock Exchange.

Shares in Sotheby’s which were selling for $42 in spring 1999, were selling at around $16 in February of this year.

These claims could have been disastrous as under US law, buyers who are overcharged can claim punitive triple damage.

The European Competition Commission. and similar bodies in Britain, Switzerland and Australia. quickly followed suit with their own investigations, although the Australians have since closed theirs without taking any action.

But while the US Justice Department has declared that Christle’s has immunity, it is not known if the European Competition Commission and the authorities in other jurisdictions will be so lenient.

In Christie’s favour is the fact that most of the commission fixing allegations are related to the time before Pinault’s takeover in 1998. His subsequent cooperation with investigators is also likely to stand him in good stead.

Although davidge was the only casualty in Christie’s, the axe fell very hard on Sotheby’s. In February Alfred Taubman and the public face of Sotheby’s in the US Diana Brooks, a millionaire New York socialite who was both president and chief executive, both resigned.

The possible $512niillion payout by the big two to clients who claim they lost money because of the alleged collusion over commission rates represents the biggest legal settlement in art market history.

The firms are now set to pay more than $256 million each to collectors and dealers who threatened to take them to court over the scandal. About 50 clients who had bought and sold art and antiques at the salerooms of the big two had lodged a joint civil claim for damages in New York which was due to be held in the spring. There were even rumblings in late February that the class-action suit might extend to Europe but it is not yet known if any Irish or British clients joined the action or can benefit from the payout.

Sothcby’s has also agreed to pay more than $30 million to some of its shareholders in the shareholder class action lawsuit. In addition they will also receive shares worth $40 million. The biggest loser in this saga appears to be Alfred Taubman.

An announcement last week from Sotheby’s stated that. while the firm’s net cash outlay as a result of these settlements will be $50 million, Taubman will be paying Sotheby’s over $200 million towards the settlement.

However, he remains philosophical about the debacle. Commenting on settlements he said he endorsed and is contributing to these settlements to facilitate the resolution of all matters and to minimise the impact on Sotheby’s, “a company I care about deeply”.

A statement released by Sotheby’s said the firm was “optimistic that a mutually acceptable resolution will be reached in the near future” with the Justice Department over the criminal allegations.

If the EU Commission continues with its case, the stiffest penalty it could impose on both auction houses is a fine of a maximum of 10 per cent of total revenues This is unlikely to happen but if it did the firms would still be able to carry the burden financially

Both firms have weathered many scandals throughout their two and a half centuries of existence and even though this is the most expensive so far in monetary terms, only time will tell how much damage has been done to their reputations.

This article was first published in the Sunday Business Post, October 1st 2000